Netflix: Stock Story

As with any investment, your capital is at risk.

Tell us about the company

Ben James: Netflix was founded in 1997 when less than 2 per cent of the world was online. But change was in the air, giving companies the opportunity to grow or be left behind. It recognised the potential for future media consumption, beginning life as a DVD-by-mail rental service to compete with the likes of Blockbuster Video. A decade later, it made the bold pivot to develop into an online streaming service. In doing so, Netflix became the first truly global entertainment and media distribution brand. And today it has over 300 million subscribers in 190 countries.

What makes this stock special?

We admire Netflix's unique ability to continuously reinvent itself, from its beginnings as a DVD-by-mail service to a streaming service, from relying on third-party content to investing in original shows, and from ad-free subscriptions to introducing an advertising-supported tier. Netflix consistently adapts to stay ahead. The company's strength lies in its exceptional scale advantage, amplified by its data-driven insights. With every new subscriber, Netflix gathers invaluable viewing data that enables it to refine content creation, personalised user experiences, and predict audience preferences with remarkable accuracy.

Original local hits like South Korea's Squid Game demonstrate this advantage, drawing huge global audiences, optimising recommendations, and spreading production budgets across millions of subscribers worldwide. We believe Netflix's distinctive culture has been the foundation for its long-term success. Its commitment to hiring top talent and empowering employees through transparency, autonomy and generous compensation encourages continuous innovation

What could the future hold?

Netflix has transitioned from disruptive newcomer to a reliable cash-generating powerhouse, with so much more to give. Its new advertising-supported tier broadens its appeal, capturing price-sensitive viewers while maintaining profitability. The company aims for a multi-billion dollar advertising business by 2030. Adding live sports and major events could significantly boost subscriber engagement and advertising revenue. Its unique blend of creative storytelling and technological excellence positions it to transform live events into global spectacles. Its expansion into gaming extends Netflix's reach into the broader battle for our attention and screen time. The company leverages its intellectual property and vast subscriber base to tap into a $100bn plus mobile gaming market.

Today, Netflix is a leader in global entertainment, yet it's still poised for substantial growth. Its globally scaled content engine, reinforced by new revenue streams and underpinned by its highly effective culture, makes it a compelling investment for enduring growth.

Risk factors

This communication was produced and approved in November 2025 and has not been updated subsequently. It represents views held at the time and may not reflect current thinking.

The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.

This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, but is classified as advertising under Art 68 of the Financial Services Act (‘FinSA’) and Baillie Gifford and its staff may have dealt in the investments concerned.

All information is sourced from Baillie Gifford & Co and is current unless otherwise stated.

The images used in this communication are for illustrative purposes only.

Financial Intermediaries

This communication is suitable for use of financial intermediaries. Financial intermediaries are solely responsible for any further distribution and Baillie Gifford takes no responsibility for the reliance on this document by any other person who did not receive this document directly from Baillie Gifford.